Top 10 Reasons Why Companies Fail

1. Lost Management: One of the scourges of the present times is the management wonder boss. This is a person who believes that spouting a certain set of jargon is akin to a ‘general survey’ of all things under the sun, especially technological matters. The problem is that these people genuinely believe they have the ‘grasping power’ for anything, making them sitting ducks for sudden disasters.

2. Failure to Adapt: It is the same old Darwinian world despite all its new gloss. There are venerable old companies closing their doors every year with the dignity of an aged and graceful loser. One has to adapt to a changing world. There is no pride in holding on to your great grandfather’s business policies when you are the one who is going to implement it.

3. Reliance on Wrong Finance: We have all seen this happen. There are announcements of big team-ups, massive expansions, and then nothing happens except a drastic loss in the company’s shares in the market. Do not count your chickens before they hatch, or even the egg comes out.

4. Bad Designing: Anything that is not shaped properly will not stand. A new business can have everything in place, and then lose out on a potential market because of an obscure and senseless campaign. The same can happen to an older business too.

5. Lack of Internal Control and Service: The customer is the king. It may be a nauseating cliché, but it is entirely true. Bad service will not be swallowed and each and every good service has an alternative provider now. Couple this with a failure to manage, motivate or guide the staff, and you have the perfect formula for killing a company.

6. New Divisions Eat the Profit of Old Ones: Another common problem. Have we not seen reliable companies suddenly sprout a useless service or try to market a sad commodity that no one can possibly want? In the confusion, the existing divisions have suffered to make up for the losses incurred by this still-born venture.

7. Failure to Foresee the Uncontrollable: If this sounds cryptic, an example will help. A company loses its customers when its sensitive data is hacked away by a rival. Why has this happened? Just because good old Joe who has served the company faithfully for the past ten years has no idea how to update an anti virus!

8. Failure to Foresee the Controllable: And this is not a contradiction. Whoever put Joe into that post was supposed to have known that it is not possible for him to gauge the importance of ‘all those little boxes and pictures that come on the screen when the computer starts up’. It is no point shifting the blame to his shoulders alone.

9. Over Confidence: The ancient ‘pride goes before a fall syndrome’. It may be a new company or old – but the main thought is – ‘how can the market not notice? It’s me, after all.’ Some companies take on heavy loans buoyed by this, and then someone else has the last laugh at the bank.

10. Over Expansion: This is directly related to the point above. We sometimes hear of this ‘aggressive expansion’ of a giant company – branches opening at Bali or Alaska. And then suddenly there is a big crash as it totters under the weight of its own decision, and another company buys it in at throwaway rates, politely referring to it as a ‘good acquisition’.

It is amply clear who the victims of the above reasons would be. All those hapless people who have not cared to stop and introspect, on themselves and their company.